At the beginning of November our Paypal account was limited. The reason, a suspiscious increase in turnover before Christmas. they send three relatively simple questions which when answered should lead to the account being opened again. The questions were answered very quickly on the Monday. Yet we did not receive an answer unti the following Monday. The information was not adequate, they wanted more detailed information, including invoices to the value of 10000€ and bank transfers to match. We provided the information as quickly as possible.
Paypal sets a limit of 72 hours to process such orders. We expected the process to be finished on the Thursday, on the Thursday nothing happened, Friday, nothing happened. On Saturday we received a telephone call from Dublin. What followed was a detailed half hour conservation on the business model, etc etc. I was told everything was satisfactory and the account would be open again. the lady would phone back later in the afternoon to confirm the details.
Two hours later I received the call. The lady said the account would be opened with the following conditions. The money which had accumalted over the period the account was limited would be transfered into a dynamic reserve. In other words, we have no access to ths money, receive no interest on this money and have no idea when we will get this money.
Secondly, when customers pay via Paypal, we receive 50% of the price and 50% 90 days later.
This percentage can be changed at will by Paypal at anytime they desire.
As a small business we cannot work with such margins. Alone the bookkeeping would prove to be a nightmare. Most interesting, if we had to refund a customer, we would have to give them the complete refund out of the 50% we received. Paypal would keep the 50%, they received in their dynamic reserve.
For a business in such an embryonic stage as ours these conditions mean bankruptcy.
During this process we have tried phoning Paypal everday, yet never received a competent
person capable of giving us an answer.
During this process we did a lot of research on the internet and it seems our case is just one of many.
I would strongly recomennd the following links
As a consumer, you have a choice. By using Paypal you are enabling them to exist and
are enabling them to destroy small businesses like ours.
At the moment we have not replaced Paypal with another pay service, the only pament method we
are using at the moment is payment in advance. If you do not trust us, do not buy.
If however you believe you are protected by Paypal, then good luck.